First-quarter sales were up at Dutch retailer Ahold but the profit picture was mixed, with the disposal of its ICA business boosting the bottom line but operating earnings flat.

Ahold booked an increase in identical-store sales in the Netherlands and the US, which helped the company post a 4.1% gain in net sales to EUR10.12bn (US$13.23bn).

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However, underlying operating margins in both markets fell and Ahold’s underlying operating income, which excluded pension costs, was flat at EUR416m.

In the Netherlands, identical sales increased 1.8%, boosted, Ahold said, by inflation and promotions. Revenue was up 7.5% at EUR3.5bn thanks to the conversion of stores acquired in the wake of rival Dutch retailer Jumbo buying C1000, as well as Ahold’s expansion into Belgium. Higher pension costs and lower discount rates hit underlying operating margin.

In the US, Ahold’s largest market, identical sales also increased 1.8%, helped by promotions and a “strong” performance from the retailer’s Stop & Shop chain. Underlying operating margin dipped from 4.2% in last year’s first quarter to 4.1%.

Ahold’s net income was EUR1.95bn, compared to EUR285m a year ago. In February, Ahold sold its 60% stake in Scandinavian retailer ICA to venture partner Hakon Invest.

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Alongside Ahold’s first-quarter results, the retailer also said it would increase its share buyback programme from EUR500m to EUR2bn by the end of 2014.

Shares in Ahold fell amid suggestions from some analysts that the extension of the programme was below expectations.

“We believe that Ahold is still looking for medium-sized acquisitions, hence the lower cash back,” Kepler Cheuvreux analyst Fabienne Caron wrote.

Click here for Ahold’s Q1 statement.

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